Taxation Laws Amendment Act (No. 2) 1999 (93 of 1999)

Schedule 7   Distributions to beneficiaries and partners that are equivalent to interest

Income Tax Assessment Act 1936

7   At the end of section 160AQY

Add:

(5) A trustee is not entitled to a rebate of tax under subsection (1) if:

(a) the trust amount was paid:

(i) in respect of an interest in the trust or partnership that was acquired, or was acquired for a period that was extended, at or after the commencing time; or

(ii) under a finance arrangement (including an arrangement extending an earlier arrangement) entered into at or after the commencing time; and

(b) the payment may reasonably be regarded as equivalent to the payment of interest on a loan.

(6) In subsection (5):

commencing time means 7.30 pm by legal time in the Australian Capital Territory on 13 May 1997.

paid : a trust amount is taken to have been paid to a taxpayer if it is included in the taxpayer's assessable income.

(7) In determining whether the payment of the trust amount may reasonably be regarded as equivalent to the payment of interest on a loan, regard is to be had to:

(a) the way in which the amount was calculated; and

(b) the conditions applying to the payment of the amount; and

(c) any other relevant matters.